We are seeing a sweeping change in unconventional well designs by US E&Ps. The move from sliding sleeves back to plug and perf was only part of the transition. The increase of source rock contact to the wellbore has been the most important reason to increasing production per foot. This continues to improve and with it initial production.
We have covered recent results by EOG Resources (NYSE:EOG) and Devon (DVN). Concho (CXO), Newfield (NFX), Marathon (MRO), Conoco (COP) and Occidental (OXY) are also well represented. Cimarex (XEC) is another operator showing improvements. It has acreage in the Delaware and STACK plays, both are two of the best in the country. XEC has been a gas focused play, but has been increasing fluids production. Newer well designs are seeing better success in deeper geology with larger percentages of natural gas. Although the location may produce less oil as a percentage, more cumulative barrels are seen.
We pulled Cimarex’s locations in Oklahoma, Texas and New Mexico brought on line since January of 2016. All locations have produced at least 20 KBO.
This provided 79 XEC locations. 43 are in Texas, 21 in Oklahoma and 15 in New Mexico. Its Vagrant and Klein locations have been outperformers based on oil production.
Texas produces the best oil curve, followed by New Mexico and Oklahoma.
This changes significantly when based on BOE. Texas has performed the best, but Oklahoma moves to second.
We see better separation by oil curve when broken down by county. The top county is Reeves followed by Culberson, Lea, Eddy, Blaine, and Canadian counties. The average Reeves location produces 216 KBO in 12 months. The Delaware outperforms from and oil perspective, but the SCOOP/STACK has a completely different resource makeup.
The county breakdown based on BOE produces a shift in rank. Culberson is followed by Reeves, Canadian, Eddy, Lea and Blaine.
The average Delaware Basin well produces 208 KBO and 1.35 Bcf in 16 months.
The average Meramec/Woodford location produces 87 KBO and 1.6 Bcf in 16 months.
While it is difficult to know exactly how good the SCOOP/STACK is, but the Delaware outperforms by a wide margin for Cimarex. More importantly, its Vagrant well has produced over 460 KBO in 12 months of well life. We continue to see very good results out of the Eagle Ford and Delaware Basin. While there is a contention this is a data error or anomalous, we are seeing results over differing areas and operators. Well results are improving, and should continue to do so well into next year.
Disclosure: I am/we are long NFX, EOG, DVN, CXO, XEC.
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